The UK government should be spending more on catching cybercriminals instead of splurging taxpayers' money on antivirus software, tech boffins have said.
Blighty goes through around £639m a year trying to clean up after attacks or prevent threats – including £108m it spends on antivirus – but the country is only spending £9.6m on techy law enforcement, a University of Cambridge study found.
"Some police forces believe the problem is too large to tackle," Ross Anderson, professor of security engineering at the University of Cambridge’s Computer Laboratory, said in a canned statement.
"In fact, a small number of gangs lie behind many incidents and locking them up would be far more effective than telling the public to fit an anti-phishing toolbar or purchase antivirus software."
The Cabinet Office said it welcomed "this latest contribution to the debate on cybercrime".
"The government believes the threat is serious and needs to be tackled and that is why we have rated cyber as a Tier 1 threat. Raising awareness and building capacity to resist threats continues to be our focus," a spokesperson told The Reg in an emailed statement.
"That includes investing in law enforcement capability to detect and apprehend cyber criminals. But we also think it is important to make sure people have the information they need to take steps to protect themselves."
The study, which was started after a request from the Ministry of Defence, also said that the amount of money the UK was losing as a result of cybercrime was being exaggerated.
"For instance, a report (PDF) released in February 2011 by the BAE subsidiary Detica in partnership with the Cabinet Office’s Office of Cybersecurity and Information Assurance suggested that the overall cost to the UK economy from cyber-crime is £27 billion annually," the research said.
"That report was greeted with widespread scepticism and [was] seen as an attempt to talk up the threat; it estimated Britain's cybercrime losses as £3bn by citizens, £3bn by the government and a whopping £21bn by companies. These corporate losses were claimed to come from IP theft (business secrets, not copied music and films) and espionage, but were widely disbelieved both by experts and in the press."
Using figures ranging from 2007 to 2012, including some which are "extremely rough estimates" based on data or assumption for the reference area, the study reckoned that all the costs of cybercrime both direct and indirect came out at around £11.7bn.
UK.gov – Cybercrime is expensive
The Cabinet Office spokesman said that Detica was best placed to explain its own methodology, but still disagreed somewhat with the study's conclusions.
"The Cyber Security Strategy was clear that a truly robust estimate would probably never be established, but that the costs are high and rising," he said.
"That said, we think there are grounds for believing that the true cost is higher than the £11bn quoted by Cambridge University.
"For example, the authors say that they can't find any hard evidence of the cost of IP theft and have therefore concluded this doesn't impose any costs beyond the defensive measures they refer to elsewhere in the paper. However, there are suspected cases of IP theft in the public domain and the costs are not nil.”
Aside from differing opinions on the cost of cybercrime, the research team also reckoned that some existing meatspace crime was moving online and being tallied up as part of the cyber cost.
The study pointed out that fraud in the welfare and tax systems, which now often takes place online, is probably costing Brits a few hundred pounds a year on average while card and bank fraud cost a few tens of pounds a year per citizen.
However, what they call 'true cybercrime', scams that completely depend on the internet, are only costing a few tens of pence a year, while the cost of antivirus software can be hundreds of times that.
Basically, the indirect costs of folks trying to protect themselves from cybercriminals actually end up costing them more.
"Take credit card fraud," said Richard Clayton, expert in the econometrics of cybercrime in Cambridge’s Computer Lab. "Direct loss is clearly the monetary loss suffered by the victim.
"However, the victim might then lose trust in online banking and make fewer electronic transactions, pushing up the indirect costs for the bank because it now needs to maintain cheque clearing facilities, and this cost is passed on to society.
"Meanwhile, defence costs are incurred through recuperation efforts and the increased security services purchased by the victim. The cost to society is the sum of all of these," he explained.
The research team concluded that there should be less spent on antivirus and firewalls and other preventative measures and "an awful lot more" on catching and punishing the perpetrators.
The study (PDF, 346KB) is due to be presented at the 11th annual Workshop on the Economics of Information Security (WEIS), which takes place in Berlin on 25 and 26 June. ®
WORLD FOREX: Spain Back In Focus As Greek Election Euphoria Fades - NASDAQ
-- Euro reverses rally against dollar as Spain's borrowing costs soar to record highs
-- Hungarian forint, South African rand and Australian dollar also give up gains
By Alexandra Fletcher
The euro surrendered its initial post-Greek election gains against the dollar in European trading Monday, falling back to levels seen late Friday as doubts emerged over the victor's capacity to form a strong Greek government and as Spanish borrowing costs surged to a new euro-era high.
The currency pair traded to as low as $1.2618--over a cent below the highs seen in Asian trading after the election results from Greece showed the pro-bailout conservative New Democracy party winning by a slim margin.
But with data showing bad debts held by Spanish banks rose to an 18-year high in April and tough talks still to come to form a new coalition government in Greece, financial markets soon bubbled up with renewed signs of stress, dragging on the euro and supporting the dollar against a range of currencies.
The cost of insuring against a default on Spanish government bonds hit a record high, while yields on Spanish 10-year government bonds pushed beyond 7% for the first time since the launch of the euro, as attention shifted back to Spain from Greece and investors awaited the official word on the level of extra provisioning that will be demanded of Spanish banks.
"It's all about Spain," said Carl Hammer, chief currency strategist at Swedish bank SEB in Stockholm.
"Greece is too small to have a systemic impact, but Spain isn't, and it's hard to find anything to alleviate the pressure. The market is so skeptical that it's hard to come up with anything to boost sentiment," he said.
Emerging market currencies such as the relatively volatile Hungarian forint also reversed its early-morning gains. The euro traded as low as HUF290.54 against the forint, but later rose to HUF293.34.
The rand also did an about-turn, while the Australian dollar traded down close to parity with the dollar after surging in Asian hours.
Greece's New Democracy party Monday is set to begin talking with other parties on forming a pro-bailout coalition government. If successful, it could end a weeks-long political stalemate and pave the way for Greece to resume negotiations with international creditors on badly needed aid.
Looking ahead, retail and housing data from the U.S. is due at 1400 GMT.
At 1036 GMT, the euro was trading at $1.2640 against the dollar, unchanged from late Friday in New York, according to trading system EBS. The dollar was at Y79.10 against the yen, compared with Y78.78, while the euro was at Y99.98, compared with Y99.55. Meanwhile, the pound was trading at $1.5682 against the dollar, compared with $1.5716 late Friday in New York.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 81.704 from about 81.593.
A summary of key levels for chart-watching technical strategists is below:
Forex spot: EUR/USD USD/JPY GBP/USD USD/CHF Spot 1037 GMT 1.2636 79.10 1.5663 0.9507 3 Day Trend Bullish Range Bullish Range Weekly Trend Range Range Range Bullish 200 day ma 1.3189 79.63 1.5825 0.9196 3rd Resistance 1.2825 79.75 1.5848 0.9573 2nd Resistance 1.2748 79.51 1.5785 0.9537 1st Resistance 1.2725 79.31 1.5742 0.9518 Pivot* 1.2632 78.97 1.5644 0.9486 1st Support 1.2618 79.05 1.5645 0.9440 2nd Support 1.2604 79.00 1.5599 0.9420 3rd Support 1.2550 78.61 1.5511 0.9403 Forex spot: AUD/USD Spot 1037 GMT 1.0098 3 Day Trend Bullish Weekly Trend Bullish 200 day ma 1.0248 3rd Resistance 1.0274 2nd Resistance 1.0225 1st Resistance 1.0146 Pivot* 1.0056 1st Support 1.0090 2nd Support 1.0011 3rd Support 0.9922
-By Alexandra Fletcher, Dow Jones Newswires; +44 (0) 20 7842 9462, alexandra.fletcher@dowjones.com; @djfxtrader
(Dow Jones Technical Strategist Francis Bray contributed to this story.)
(END) Dow Jones Newswires 06-18-120717ET Copyright (c) 2012 Dow Jones & Company, Inc.
Trade Forex as Sterling Falls Following BoE Announcement - Yahoo Finance
LONDON, June 18, 2012 /PRNewswire/ --
On Friday, June 15, the pound fell against the US dollar following the Bank of England's announcement of an emergency liquidity package the day before. But how will you profit from this fall?
In the guide below, we show you how you can profit from the depreciating sterling through a spot forex trading account from City Index.
BoE Announces Emergency Liquidity Package
On Thursday evening last week (14 June), Governor Mervyn King suggested more quantative easing (QE) could be on its way as the Bank of England announced an emergency liquidity package to support the British banking system.
In his keynote speech, King said that the BoE would also be providing cheap long-term funding to encourage lending to businesses and consumers.
Pound Depreciates against Dollar
Whilst many investors in the marketplace said the measures planned by King would support the UK economy; further suggestions of monetary easing prompted investors to sell-off sterling in early London trade on Friday (15 June).
How to Trade Forex
With a City Index forex trading account you can take a position on the future price movement of 37 currency pairs within the foreign exchange market.
As a global currency market - trading 24-hours a day from Sunday evening to Friday night - forex offers traders multiple opportunities to potentially profit from fast-moving major, minor and exotic currency pairs.
Unlike in traditional equity markets, trading forex with City Index allows you to profit from market movements - regardless of whether they are rising or falling.
With this in mind, using the example above whereby the pound depreciates against the US dollar - traders have the potential to 'go short' and sell the pound with the aim of potentially profiting from every pip that it depreciates further.
In addition, as a leveraged product - forex trading requires only a small percentage of the underlying market's total value as an initial deposit.
This enables traders to control a relatively large exposure for only a small amount, gain greater access to the global currency markets and possibly magnify gains.
It is important to remember, however, that as a leverage product, you also run the risk of losing more than your initial deposit. A forex risk management strategy should be used in order to limit potential losses.
Start Trading Forex
To start trading forex across a range of trading platforms - including mobile - you can apply for a forex trading account with City Index through their website: http:http://www.cityindex.co.uk
Read More Forex Trading Tips
If you found this article helpful, you may want to read more just like this. You can access a range of free forex trading tips, guides and articles through the City Index website also.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.
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MONEY MARKETS-Spanish bond shortage distorts repo - Reuters UK
* Spanish bond shortage distorts repo market
* Italian rates rise but market still functioning
* Interbank cash rates fall on rate cut expectations
By Kirsten Donovan
LONDON, June 18 (Reuters) - A lack of available Spanish government bonds, due to so many being used to obtain funding at the European Central Bank, is distorting pricing in repo markets and causing investors headaches as they seek to cover hefty short positions.
As international investors sold Spanish government bonds this year, domestic banks bought them and parked them at the ECB in return for funds - particularly during the two recent three-year funding operations.
As a result, investors who need the bonds because of their own short positions must pay a premium for the paper.
When this happens in repo markets - where banks commonly use government bonds as collateral to raise funding - bonds are said to be trading "special".
Effectively, the investor who needs the bonds pays a premium to their counterparty in the trade - the opposite of a typical repo trade where the party borrowing cash pays the premium.
"There's some good evidence of a collateral shortage out there," said ICAP rate strategist Chris Clark. "Quite a lot may be being used at the ECB and the market short (positions) out there will be increasing the demand for specific bonds."
It is the opposite of what might be expected when a country's debt comes under pressure. Then counterparties are usually more reluctant to be left holding the bonds.
"The collateral just isn't there. That's one of the problems and the few bonds that are still available are highly sought after by people who want to cover their short positions," said Commerzbank rate strategist Benjamin Schroeder.
Ten-year Spanish government bond yields have risen more than 130 basis points since the start of May, while two-year yields are up over 2 percentage points.
That prompted international clearing house LCH.Clearnet SA to increase the cost of using Spanish bonds to raise funds via its repo service last month. Analysts said their trading desks had since seen volumes over the platform drop.
"It's a further segregation of European money markets, where banks are retreating from central clearing houses and going back to domestic clearing or bilateral agreements," Schroeder said.
As the euro zone debt crisis intensified this month, mainly due to worries about Spain's banking sector, Italian general collateral (GC) repo rates, paid to borrow funds against a basket of government bonds, have been pushed higher.
There is little trade in the Spanish general collateral market but banks are still able to borrow using Italian bonds as collateral, despite Italy being seen as vulnerable to contagion from worries about Spain.
Three-month Italian GC rates rose to 0.42 percent at the end of last week, compared to the Eonia overnight rate at around 30 basis points, according to ICAP. The Italian rate had traded below Eonia from the time of the ECB's second three-year funding operation at the end of February until the end of May.
"There's been a rise in Italian general collateral rates, both outright and relative to the Eonia OIS curve," ICAP's Clark said. "Despite a reduction in the amount of term activity that goes on, the Italian market is still very much functional."
RATE SPECULATION
Three-month Euribor interbank lending rates eased again, hitting their lowest since the second quarter of 2010 as speculation grew the ECB may cut interest rates.
ECB president Mario Draghi heightened expectations the bank could cut interest rates or take further policy action soon after saying on Friday that the euro zone economy faced serious risks and no inflation threat.
September and December Euribor futures contracts rallied to contract highs, pushing implied rates lower.
Markets are pricing in a 50 percent chance of a 12.5 basis point cut in the ECB's 0.25 percent deposit rate this year, and a 25 percent of the rate being cut to zero, according to RBS.
FOREX-Euro retreats from 1-month high vs dollar - Reuters
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Nigeria: Concern Mounts Over Forex Reserves Accretion - AllAfrica.com
The steady growth recorded by Nigeria's forex reserves since this year may discontinue as a result of the sharp drop in the price of crude oil.
THISDAY checks Sunday showed that the forex reserves -derived mainly from the proceeds of crude oil production, fell by $218 million in the last nine days, from $37.768 billion as at June 6 to $37.550 billion last Thursday.
The reserves which stood at $32,985 billion at the beginning of the year, improved remarkably to $35.608 billion at the end of the first quarter.
On the other hand, crude oil price settled at $83.99 per barrel on Friday, after touching an eight-month low near of $81.
This was attributed to concern over Spain's bank bailout, the euro debt scenario, among other external factors. The current value of the oil price reflected a drop by 35 per cent, compared with its peak value of $127 per barrel in mid-March.
At the current rate of decline, financial market experts predicted that forex inflow into the country would fall from the $4.31 billion it was in January to $3.34 billion next month, while they also forecast the external reserves would diminish to $22 billion- covering less than three months of imports.
The development has also impacted negatively on the naira as it has depreciated significantly against the United States dollar, especially at the interbank and parallel markets.
For instance, at the interbank market, the naira has so far fallen by N4.68 to N163.68 to a dollar on Friday, as against the N159 to a dollar it was on May 15. Similarly, at the parallel market, the local currency dropped by a total of N4.20 to close at N164.20/$1 on Friday, compared with the N160/$1 to a dollar it was a month earlier.
Managing Director of Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, said the recent decline in oil prices was partly triggered by market sentiments of a further deepening crisis in the euro-zone, in conjunction with weak economic growth recorded in advanced economies in the first quarter of the year.
"The question however is how vulnerable are Nigeria's external reserves, should oil prices drop further, for example, to a low of $80 per barrel? The Federal Government's budget is benchmarked to oil price at $72 per barrel, while Bonny Light crude is trading at $98 per barrel.
This is a variance of $26 per barrel. At the current rate of decline, we expect forex inflows to fall from $4.31 billion in January to $3.34 billion in July.
"If oil prices were to drop to $80 per barrel (which is 50 per cent likelihood based on current trends), there is a 95 per cent likelihood that forex inflows will decline to approximately $3.03 billion."
"In this situation Nigeria's external reserves would be expected to follow suit and drop to a value as low as $22 billion, covering less than three months of imports. Resultantly, the CBN may be forced to allow the naira to depreciate sharply to N165/$1, to compensate for the substantial loss in oil revenue."
International Financial Advisory and Investment firm - Renaissance Capital (RenCap) also warned that the drop in oil price may pose some risk to the Nigerian economy if the trend continues, even as it expressed concern over the ability of the federal government to meet its revenue projections if the trend continues.
Vice President, Sub-Saharan Africa Economist, RenCap, Yvonne Mhango, said: "This evidently has implications for Nigeria given that it is an important oil exporter. Our estimates suggest that the risk to Nigeria's economy becomes significant if the average oil price for 2012 drops below $75 per barrel."
Similarly, FSDH Securities Limited, in its latest report, stated that "the recent sharp drop in the international price of oil has severe negative implications for the country's external reserves position in the short-to-medium term. The recent shortfall in crude oil production, coupled with the declining price of crude oil could put further pressure on the exchange rate in the face of growing demand, particularly from oil importers."
As a result of all these, the Coordinating Minister of the Economy/Minister of Finance, Dr. Ngozi Okonjo-Iweala, last Wednesday, advised members of the Federal Executive Council (FEC) to be proactive in decision making, so as to forestall effects of possible economic recession based on happenings in the global economy. She had warned them to shun wastefulness in the management of the nation's resources.
Tough luck, Generation X: Only half of wealthy Baby Boomers to leave money for their kids...and ONE IN THIRD would rather give it to charity - Daily Mail
- Baby Boomers defined as people between the ages of 47 and 66
- Generation X refers to people born between early 1960s and early 1980s
- 55 per cent of Baby Boomers believe it's important to leave money to offspring
- Most Baby Boomers believe each generation should earn its own wealth
- Three-quarters of people younger than 46 favor leaving money to kids
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When members of the Baby Boomers generation die in the next 50 years, they will leave trillions of dollars in wealth behind, but their children should not hold their breath for a large inheritance.
According to the U.S. Trust Insights on Wealth and Worth annual study released on Monday, only 55 per cent of Baby Boomers - those between the ages of 47 to 66 - think it is important to leave money for their offspring.
U.S. Trust commissioned an independent, national survey of 642 high net worth adults, who were not clients, with at least $3million in investable assets.
Givers: A study found that 31 per cent of wealthy Baby Boomers would prefer to leave their money to charity
One of three Baby Boomers surveyed – about 31 per cent - don’t think it is important to leave a financial inheritance and said they would rather leave money to charity than to their children.
By contrast, three-quarters of wealthy people under age 46 said it's a priority to leave inheritance for their children.
The top reason for not wanting to leave money for their kids is the belief shared by some Baby Boomers that each subsequent generation should work to earn its own wealth.
Following closely behind is the thought that it is more important to invest in children’s success while they are growing up.
‘Our survey points to a shift in generational behavior and outlook, most likely shaped by personal experience and societal responses to economic realities,’ said Keith Banks, president of U.S. Trust.
Banks added that well-off parents are concerned that the next generation is not prepared to inherit wealth, which is not surprising considering the fact that most of the Baby Boomers surveyed don't talk to their kids about money: just 37 per cent said they've fully disclosed their net worth to their children.
Kept in the dark: Just 37 per cent of Baby Boomers said they've fully disclosed their net worth to their kids
Those over age 67 said they weren't having this discussion because they were raised to avoid money talk, while younger respondents said they didn't want to inhibit their kids' work ethic.
Unlike the majority of people from her generation, 63-year-old Kathleen Taylor, of Chimacum, Washington, taught her two grown children since they were young to be responsible for their own money.
That is why she plans to leave most of her money to her children and some money to charitable causes, ABC News reported.
One way Taylor and her husband taught their children about responsible spending was providing the value of college tuition, room and board to each of them and putting them in charge of paying the bills.
‘People thought we were crazy,’ she told ABC.
The Taylors plan to start a college fund once their children start having their own kids. And they intend to add to it on their grandchildren’s birthdays as long as Taylor and her husband are alive.
Mrs Taylor said she hopes her own children will do the same for their great-grandchildren.
The U.S. Trust study also has found that 42 per cent of Baby Boomers and 54 per cent of those under age 46 are paying medical costs for their parents or other relatives.
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